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Xerox ($XRX) to Acquire Lexmark from Chinese Owners for $1.5 Billion, Aiming for 2025 Closure

Dec 23, 2024, 02:19 PM

Xerox Corp. ($XRX) has agreed to acquire Lexmark International, a printer and printing software maker, from its Chinese owners Ninestar, PAG Asia Capital, and Shanghai Shouda Investment Centre in a deal valued at $1.5 billion, including debt. The acquisition will bring Lexmark back under U.S. ownership, reversing its sale to Chinese investors in 2016. The deal, expected to close in the second half of 2025, is subject to regulatory approvals and the approval of Lexmark's shareholders. Xerox aims to strengthen its core printing portfolio and expand its global print and managed print services business through this acquisition. The transaction is anticipated to be immediately accretive to Xerox's earnings per share and free cash flow, supporting the company's financial strategy of revenue stabilization and double-digit adjusted operating income growth. Xerox plans to cut costs by more than $200 million within two years of the deal's closure. The combined organization is expected to serve over 200,000 customers in 170 countries and operate 125 manufacturing and distribution facilities across 16 countries. Xerox also aims to improve its position in the A4 color market and diversify its distribution and geographic presence, particularly in the Asia-Pacific region. As part of the agreement, Xerox's board has approved a reduction in its annual dividend from $1.00 per share to $0.50 per share to enhance its capacity to reduce debt while continuing to reward shareholders.